KSB Ltd:Annual Report 2023-24 Analysis

KSB Ltd.: A Comprehensive Overview #

About the Company #

Year of Establishment and Founding History #

KSB Ltd. was established in India in 1960. It is a subsidiary of KSB SE & Co. KGaA, a German multinational corporation founded in 1871 by Johannes Klein, Friedrich Schanzlin and Jacob Becker in Frankenthal, Germany.

Headquarters Location and Global Presence #

KSB Ltd.’s headquarters are located in Pune, Maharashtra, India. The parent company, KSB SE & Co. KGaA, has a global presence with manufacturing facilities and sales offices in numerous countries worldwide.

Company Vision and Mission #

Unfortunately, publicly available information on KSB Ltd.’s specific vision and mission statements is limited. Generally, KSB focuses on providing innovative and reliable solutions for fluid transport.

Key Milestones in Their Growth Journey #

• 1960: KSB Ltd. established in India.
• Continuous Expansion: Expansion of manufacturing facilities and product portfolio over the years.
• Technological Advancements: Introduction of new technologies and innovations in pumping solutions.
• Market Leadership: Emergence as a prominent player in the Indian pump industry.

Stock Exchange Listing Details and Market Capitalization #

KSB Ltd. is listed on the Bombay Stock Exchange (BSE: 500115) and the National Stock Exchange (NSE: KSB).

Market capitalization can vary. Refer to financial websites like Google Finance, Yahoo Finance, or the BSE/NSE websites for the most up-to-date information.

Recent Financial Performance Highlights #

• Refer to KSB Ltd.’s latest annual reports and financial statements for up-to-date revenue, profit, and other key financial indicators. Typically, these reports are available on the company’s investor relations page and on the BSE/NSE websites.

Management Team and Leadership Structure #

• Information regarding the current management team and leadership structure can be found on the KSB Ltd. website, specifically in the “About Us” or “Leadership” sections.

Notable Awards or Recognitions #

It is recommended to check KSB Ltd.’s website or press releases for any recent awards or recognitions.

Their Products #

Complete Product Portfolio with Categories #

KSB Ltd. offers a wide range of pumps, valves, and related systems for various applications. Key product categories include:

• Centrifugal Pumps: End-suction pumps, split-case pumps, submersible pumps, multistage pumps, boiler feed pumps.
• Submersible Motor Pumps: Drainage pumps, sewage pumps, borehole pumps.
• Valves: Gate valves, globe valves, check valves, butterfly valves, ball valves.
• Automation: Automation systems for pumps and valves, including frequency inverters and control systems.
• Service: Comprehensive service solutions, including installation, maintenance, repair, and spare parts.

Flagship or Signature Product Lines #

• MegaCPK: A standardized chemical pump known for its reliability and efficiency.
• CPK: Process pump.
• Multitec: High-pressure multistage pump.

Key Technological Innovations or Patents #

• KSB is continuously innovating in pump design, materials, and control systems to improve efficiency, reliability, and reduce energy consumption. Specific patent details can be found through patent search databases, referring to patents assigned to KSB SE & Co. KGaA.

Manufacturing Facilities and Production Capacity #

KSB Ltd. has manufacturing facilities in India. Specific details on production capacity are generally not publicly disclosed.

Quality Certifications and Standards #

KSB products and facilities are certified to meet various international quality standards, including:

• ISO 9001: Quality Management System
• ISO 14001: Environmental Management System

Any Unique Selling Propositions or Technological Advantages #

• Energy Efficiency: Focus on developing energy-efficient pumps and systems to reduce operating costs.
• Reliability: Robust design and high-quality materials ensure long-term reliability.
• Comprehensive Solutions: Offering complete solutions, including pumps, valves, automation, and service.
• Global Expertise: Benefit from the technological expertise and global network of the KSB Group.

Recent Product Launches or R&D Initiatives #

Refer to KSB Ltd.’s website or press releases for information on the most recent product launches and R&D initiatives.

Primary Customers #

Target Industries and Sectors #

KSB Ltd. serves a wide range of industries and sectors, including:

• Power Generation: Pumps for cooling water, boiler feed, and other applications.
• Oil & Gas: Pumps for pipelines, refineries, and offshore platforms.
• Water & Wastewater: Pumps for water treatment, sewage treatment, and irrigation.
• Chemicals & Petrochemicals: Pumps for handling corrosive and hazardous fluids.
• Building Services: Pumps for heating, ventilation, and air conditioning (HVAC).
• General Industry: Pumps for various industrial processes.

Geographic Markets (Domestic vs. International) #

KSB Ltd. primarily serves the Indian market, but also exports to other countries.

Major Client Segments (Agricultural, Industrial, Residential, etc.) #

• Industrial: A significant client segment, encompassing a wide range of manufacturing and processing industries.
• Infrastructure: Projects related to water supply, wastewater treatment, and power generation.
• Building Services: Supplying pumps for HVAC systems in commercial and residential buildings.

Distribution Network and Sales Channels #

KSB Ltd. utilizes a combination of direct sales, distributors, and channel partners to reach its customers.

Major Competitors #

Direct Competitors in India and Globally #

• Domestic: WPIL Limited, CRI Pumps, Flowmore
• Global: Grundfos, Sulzer, Xylem, ITT Corporation

Industry Challenges and Opportunities #

• Industry Challenges: Increasing competition, fluctuating raw material prices, stringent environmental regulations, demand for energy-efficient solutions.
• Industry Opportunities: Growing demand for water and wastewater treatment infrastructure, increasing industrialization in developing countries, government initiatives promoting infrastructure development, adoption of smart pumping technologies.

Future Outlook #

Expansion Plans or Growth Strategy #

KSB Ltd.’s specific expansion plans are best obtained from company announcements or investor presentations. Generic strategies may include:

• Expanding its product portfolio to cater to emerging market needs.
• Increasing its market share in existing segments.
• Investing in new technologies and R&D.
• Expanding its manufacturing capacity to meet growing demand.
• Strengthening its distribution network and service capabilities.

Sustainability Initiatives or ESG Commitments #

• Again, check KSB Ltd.’s website or sustainability reports. General areas of focus usually include:
• Reducing energy consumption in its operations.
• Developing environmentally friendly products.
• Promoting sustainable water management practices.

Industry Trends Affecting Their Business #

• Digitalization: Adoption of smart pumping technologies and remote monitoring systems.
• Energy Efficiency: Increasing demand for energy-efficient pumps and systems.
• Sustainability: Growing focus on environmental sustainability and water conservation.
• Infrastructure Development: Government investments in infrastructure projects driving demand for pumps and valves.

Long-Term Vision and Strategic Goals #

• KSB Ltd.’s specific long-term vision should be sought in the company’s reports. But general goals for pump manufacturers can include:
• Maintaining its position as a leading provider of pumping solutions.
• Expanding its global presence and market share.
• Delivering sustainable growth and shareholder value.
• Becoming a leader in innovation and technology.

Financial Analysis Report: KSB Limited - Fiscal Year 2024 #

Comprehensive Performance Overview #

KSB Limited demonstrated strong operational and financial performance in FY 2024, driven by robust domestic demand, strategic initiatives in key growth sectors, and a continued focus on sustainability and aftermarket services. The company capitalized on government infrastructure initiatives and expanded its market presence despite global economic headwinds.

Three-Year Financial Trend Analysis (Standalone Basis) #

• Revenue Growth: Revenue from operations and other income showed consistent growth, reaching INR 25,746 million in FY 2024, up from INR 22,835 million in FY 2023 and INR 18,674 million in FY 2022. This indicates strong top-line performance.
• Profitability: Profit Before Tax (PBT) increased to INR 3,220 million in FY 2024 from INR 2,749 million in FY 2023 and INR 2,407 million in FY 2022. Profit After Tax (PAT) followed a similar trajectory, reaching INR 2,409 million in FY 2024 compared to INR 2,046 million in FY 2023 and INR 1,793 million in FY 2022.
• Margins: Operating Profit Margin stood at 14.72% and Net Profit Margin at 9.36% in FY 2024, showing slight improvements or stability compared to FY 2023 (14.45% and 9.14% respectively), indicating efficient cost management alongside revenue growth.
• Return Ratios: Return on Capital Employed (RoCE) improved marginally to 23.45% in FY 2024 from 23.20% in FY 2023, reflecting efficient use of capital. Return on Net Worth was 18.03% in FY 2024.
• Earnings Per Share (EPS): Basic and Diluted EPS for FY 2024 was INR 13.84 (post 1:5 share split effective July 25, 2024). Pre-split adjusted EPS showed growth over the prior years (FY23: INR 58.78, FY22: INR 51.50).
• Leverage & Liquidity: The company maintained a debt-free status (Debt-Equity Ratio: 0). The Current Ratio improved slightly to 2.13 in FY 2024 from 2.05 in FY 2023, indicating healthy short-term liquidity. Inventory and Debtor Turnover days remained relatively stable, suggesting consistent working capital management.

Business Segment Performance (Consolidated Basis) #

• Pumps: The Pumps segment remained the primary revenue driver, with sales (including related spares) reaching INR 21,081 million in FY 2024, a notable increase from INR 18,968 million in FY 2023.
• Valves: The Valves segment also demonstrated strong growth, with sales (including related spares) increasing to INR 4,250 million in FY 2024 from INR 3,504 million in FY 2023.
• Exports: Export revenue grew by 16.7% to INR 3,500 million in FY 2024 from INR 2,999 million in FY 2023, indicating successful international market penetration despite potential global headwinds.
• Industry Growth Comparison: KSB’s segment growth appears to significantly outperform projected market CAGRs (Indian Industrial Pumps: 4.80% 2025-2030; Industrial Valves: >7% 2025-2030), although direct annual comparison data is limited in the report.

Major Strategic Initiatives and Progress #

• Aftermarket Focus (KSB SupremeServ): Significant emphasis was placed on expanding service offerings across the product lifecycle. Key milestones included the first pump maintenance for ‘RSR350’ at NPCIL, submarine pump field services, seal replacements, and the launch of MEGA/MEGACHEM for streamlined parts ordering. The service network comprises 14 Branch Offices and service stations across India.
• Solar Pumps: Continued success in the solar segment, securing 7000+ work orders and executing 5900+ systems in FY 2024, driven by schemes like PM KUSUM. Qualification achieved in new states (Tripura, Meghalaya, MP).
• Nuclear Sector: Strengthened capabilities with a new Dynamic Seal Test Facility, successful prototype reciprocating pump launch for fuel handling, and hosting an NPCIL customer meet, reinforcing its role as a key partner.
• Valves Division: Expanded product range (larger sizes), enhanced sustainability with a 700 kWp rooftop solar installation (saving INR 1.9M annually, reducing 660 MT CO2), and achieved TSG Certification for pressure equipment manufacturing.
• Technology & Portfolio Expansion: Acquired technology from BP&CL, enhancing the portfolio with additional centrifugal, reciprocating, and mud pumps under the ‘Make in India’ initiative. Launched several new products across Agricultural, Commercial, Industrial, and Oil & Gas segments.
• Digital Transformation: Implemented digital tools (KSB Guard, Sonolyzer®) for performance monitoring and energy reduction. Launched MEGA and MEGACHEM platforms for spare parts. ESG digitization solution implemented for data management and reporting.
• Operational Excellence: Inaugurated central warehouse extension, achieved first ‘Express Line’ dispatch for an international order, and successfully executed major pump overhauling projects under challenging conditions.

Risk Landscape Changes #

• External Risks: Management identifies ongoing geopolitical tensions, global inflation, rising interest rates, potential energy market volatility, and supply chain disruptions as key external risks impacting growth, particularly exports. Commodity price volatility remains a concern.
• Internal/Market Risks: Intensifying competition, pressure on product life cycle costs, reduced development time expectations, and potential slowdown in private sector investments are noted. Climate change presents both physical and transitional risks. IT security and data protection are highlighted as increasing risks with business expansion.
• Audit Identified Risk: Auditors identified the Appropriateness of Revenue Recognition under Ind AS 115 as a Key Audit Matter due to the significant judgment involved in contract accounting, performance obligation identification, allocation, and timing of recognition.
• Mitigation Strategies: Diversification into new segments (Hydrogen, Firefighting, Railways), strengthening supply chain partnerships, expanding domestic presence, investing in automation and digital solutions, robust risk management committee oversight, and adherence to ESG principles are key mitigation approaches.

ESG Initiatives and Metrics #

• Environmental:
  • GHG Emissions: Achieved 35% absolute reduction (Scope 1 & 2) vs FY23 baseline. Obtained reasonable assurance (Scope 1&2) and limited assurance (Scope 3 - selected categories) from SGS India. Targeting 30% absolute reduction by 2025 (vs 2022 baseline).
  • Renewable Energy: Achieved 37% share of renewable electricity consumption in FY24. Inaugurated 6.65 MWp open access solar project, targeting 70% green power share. Total rooftop capacity at 4.6 MWp across various plants. Targeting 40% green energy generation by 2025.
  • Water Management: Recycled 39,360 KL of water. Achieved Zero Liquid Discharge (ZLD) certification for Chinchwad and Coimbatore plants. Targeting 6% freshwater consumption reduction by 2025 (vs 2022).
  • Waste Management: Achieved Zero Waste to Landfill (ZWTL) certification for Chinchwad, Shirwal, and Sinnar plants.

Detailed Analysis #

Financial Analysis Report: KSB Limited (Year Ended December 31, 2024) #

Balance Sheet Analysis #

3-Year Comparative Analysis (Standalone) #

The company demonstrates consistent growth across key financial position indicators over the past three years. Total Equity has expanded significantly, driven primarily by retained earnings, reflecting sustained profitability. Asset growth corresponds with the equity expansion, indicating reinvestment and operational scaling. The company maintains a low-leverage position with minimal non-current liabilities relative to its equity base.

Note: Current Liabilities derived implicitly (Total Assets - Total Equity - Non-Current Liabilities).

Significant Changes in Major Line Items (Standalone, >10% YoY Change 2024 vs 2023) #

The company experienced robust growth in revenue, translating into significant increases in profitability (PBT and PAT). This operational growth is reflected in higher material consumption and employee benefit expenses. A substantial increase in Net Current Assets suggests expansion in operational scale or changes in working capital management.

Note: EPS comparison requires caution due to the 1:5 share split effective July 25, 2024. Post-split EPS for 2024 is INR 13.84 (vs. pre-split adjusted INR 11.76 for 2023). Financial Summary shows pre-split EPS for 2023 as 58.78.

Working Capital Trends (Standalone) #

Working capital (represented by Net Current Assets) has increased significantly YoY. The Current Ratio improved slightly, indicating a strong liquidity position. Inventory Turnover days increased marginally, while Debtors Turnover days decreased, suggesting potentially faster collection cycles but slower inventory movement.

Note: Turnover Ratios from MD&A Key Ratios; Payables Turnover calculated using Purchases / Average Trade Payables (Requires Payables data from B/S)

Asset Quality Metrics (Standalone) #

Asset quality appears stable. Trade receivables show a healthy aging profile with the bulk falling under ‘Not Due’ or ‘< 6 months’. The loss allowance remains relatively low as a percentage of gross receivables. No impairment on investments was noted. Property, Plant & Equipment continues to grow, indicating ongoing investment.

Note: Based on B/S, Note 7 (TR aging), Note 6a (Investments), Note 3 (PPE)

KSB Limited - Fiscal Year 2024 Financial Analysis #

Revenue Analysis #

Overall Growth #

Standalone revenue from operations plus other income grew by 12.7% to ₹25,746 Million in FY 2024 from ₹22,835 Million in FY 2023. Consolidated revenue from operations showed similar growth (12.7%) reaching ₹25,330.86 Million.

Segment Performance (Consolidated) #

Pumps #

Revenue increased by 11.1% to ₹21,081 Million in FY 2024 from ₹18,968 Million in FY 2023.

Valves #

Revenue grew by 21.3% to ₹4,250 Million in FY 2024 from ₹3,504 Million in FY 2023.

Geographical Performance (Standalone/Consolidated) #

Domestic (Within India) #

Revenue grew by 12.1% to ₹21,830.64 Million.

Exports (Outside India) #

Revenue showed stronger growth at 16.7%, reaching ₹3,500.22 Million.

Cost Structure Analysis (Standalone) #

Cost of Materials Consumed #

Increased as a percentage of income to 50.0% in FY 2024 from 47.1% in FY 2023.

Purchases of Stock-in-Trade #

Increased to 10.0% in FY 2024 from 8.4% in FY 2023.

Employee Benefits Expense #

Stable at 11.8% in both FY 2024 and FY 2023.

Other Expenses #

Remained relatively consistent at 17.7% in FY 2024 versus 17.8% in FY 2023.

Finance Costs #

Decreased as a percentage of income to 0.1% in FY 2024 from 0.2% in FY 2023.

Depreciation & Amortisation #

Stable at 2.2% in both years.

Profitability and Margin Analysis (Standalone) #

Gross Margin #

Decreased to 39.6% in FY 2024 from 44.9% in FY 2023.

Operating Profit Margin #

Improved to 12.8% in FY 2024 from 12.5% in FY 2023.

Profit Before Tax (PBT) Margin #

Increased to 12.7% in FY 2024.

KSB Limited - FY 2024 Financial Analysis #

Cash Flow Analysis (Standalone) #

• Operating Cash Flow (OCF): Net cash generated from operating activities stood at INR 1,931.61 million (FY23: INR 1,968.61 million). Key drivers included Profit Before Tax (PBT) of INR 3,220.29 million, adjusted primarily for Depreciation & Amortization (INR 570.86 million) and changes in working capital. Significant working capital adjustments involved an increase in Trade Receivables (INR -1,691.95 million) and an increase in Trade Payables (INR 667.08 million).
• Investing Cash Flow (ICF): Net cash used in investing activities was INR -1,260.17 million (FY23: INR -88.31 million). This was primarily driven by the purchase of Property, Plant & Equipment (PPE) and Intangible Assets (INR -1,335.40 million) and net investments in fixed deposits (INR -487.46 million), offset partially by interest received (INR 124.82 million) and proceeds from asset disposals (INR 4.45 million).
• Financing Cash Flow (FCF): Net cash used in financing activities amounted to INR -628.32 million (FY23: INR -607.73 million), mainly due to dividend payments (INR -609.08 million) and repayment of lease liabilities (INR -22.04 million).
• Free Cash Flow (FCF) (Approx.): Calculated as OCF minus purchases of PPE & Intangibles, FCF (Standalone) was approximately INR 596.21 million (FY23: INR 903.03 million).

Working Capital Management #

• Debtors Turnover: Increased to 76 days in FY24 from 73 days in FY23, indicating a slight increase in the time taken to collect receivables.
• Inventory Turnover: Increased marginally to 110 days in FY24 from 109 days in FY23, suggesting inventories were held for slightly longer.
• Trade Payables Turnover: (Not explicitly provided, but inferred from Balance Sheet/Cash Flow) Trade payables increased, contributing positively to operating cash flow.
• Overall: Working capital changes negatively impacted OCF in FY24 compared to FY23, primarily due to the significant increase in trade receivables.

Capital Expenditure (Capex) Analysis #

• Standalone Capex: Purchases of PPE and Intangibles amounted to INR 1,335.40 million (FY23: INR 1,065.58 million).
• Consolidated Capex: Purchases of PPE and Intangibles were INR 1,335.40 million (FY23: INR 1,065.58 million), indicating negligible capex in the subsidiary.
• Segment Capex: The segment report (Note 33, Consolidated) shows total cost incurred to acquire segment PPE as INR 1,011.14 million for Pumps and INR 209.91 million for Valves in FY24 (FY23: INR 896.12 million for Pumps, INR 173.27 million for Valves). This suggests a higher capex allocation towards the Pumps segment, consistent with its larger revenue contribution.

Dividends and Share Buybacks #

• Dividend FY24: The Board proposed a final dividend of INR 4.00 per share (face value INR 2.00), representing a 200% payout. This follows a dividend of INR 3.50 per share (adjusted for split) for FY23. The dividend payout has consistently increased over the last five years (Financial Summary).
• Share Split: The company executed a 1:5 stock split (INR 10 face value to INR 2 face value) effective July 25, 2024, to improve liquidity and encourage wider investor participation.

Debt Service Coverage #

• Debt Position: The company appears effectively debt-free, with no significant interest-bearing borrowings listed on the standalone or consolidated balance sheets.
• Interest Coverage Ratio: Reported at 121.05 times in FY24, up significantly from 52.74 times in FY23 (MD&A). This very high ratio reflects minimal finance costs (primarily lease interest) relative to operating profit (EBIT).

Liquidity Position and Cash Conversion Cycle (CCC) #

• Current Ratio: Stood at 2.13 in FY24, slightly improved from 2.05 in FY23, indicating a healthy liquidity position with current assets more than double current liabilities.
• Cash Conversion Cycle (Estimated): Using the turnover days provided (Debtors: 76, Inventory: 110) and estimating payables turnover days (requires calculation based on COGS/Purchases and average payables, data not fully available for direct calculation here), the CCC appears relatively stable but reflects significant capital tied up in inventory and receivables. The increase in debtor days slightly lengthens the cycle.

Free Cash Flow (FCF) Yield Trends (Standalone) #

• FCF Calculation:
  • FY24 FCF (Approx.): INR 596.21 million (OCF: 1931.61 - Capex: 1335.40)
  • FY23 FCF (Approx.): INR 903.03 million (OCF: 1968.61 - Capex: 1065.58)
• Net Worth:
  • FY24: INR 14,250.84 million
  • FY23: INR 12,478.44 million
• FCF Yield (FCF / Average Net Worth):
  • FY24 Yield (Approx.): 596.21 / [(14250.84 + 12478.44)/2] ≈ 4.46%
  • FY23 Yield (Approx.): 903.03 / [(12478.44 + 10930.95)/2] ≈ 7.71%
• Trend: The FCF yield decreased in FY24 compared to FY23, primarily due to higher capex and slightly lower OCF, alongside growth in the net worth base. While positive, the yield suggests a lower proportion of net worth was converted into free cash available to investors in FY24 relative to FY23.